Codemasters Group Holdings

History

2020

EA bought Codemasters for $1.2bn

On December 14, 2020, Electronic Arts (EA) announced the purchase of Codemasters for $1.2 billion. Thus, one of the largest mergers has been announced in the computer games market, which began to grow even faster during the pandemic.

A month before this deal, it became known about the sale of Codemasters to Take-Two Interactive Software for £726m. The agreement was concluded, but subsequently withdrawn, since EA offered shareholders of the racing simulator manufacturer more money ($7.98 versus $6.39 per share, respectively). Take-Two's market capitalization is half that of EA.

EA acquires Codemasters for $1.2 billion

EA's Codemasters deal is scheduled to close in the first quarter of 2021. After the announcement of this agreement, Codemasters shares rose 20%, and EA quotes rose about 2%.

Under the terms of the deal, Codemasters' leadership team will remain in place despite the company taking over from EA. At the same time, the rights to the Formula 1 game will return to EA.

According to Codemasters chairman Gerhard Florin, the upcoming union will provide the studio with an "exciting and prosperous future" and allow teams to "create, run and support more and more large games."

Our industry and category of racing games are growing, and together we will be able to take the lead in the new era of racing entertainment, "said Andrew Wilson, CEO of Electronic Arts.

In his opinion, with the help of EA technologies, its experience in developing for different platforms and global coverage, "we will be able to take existing franchises and make them even better."

According to Bloomberg, due to the COVID-19 coronavirus pandemic, revenue in the video game industry in 2020 will grow by 20% - to $174.9 billion, which will exceed previous forecasts and market growth in 2019.^[1]

Take-Two Interactive Software buys Codemasters Group Holdings for $1 billion

In mid-November 2020, Take-Two Interactive Software, behind popular video games such as Grand Theft Auto and NBA 2K, decided to buy British racing simulator developer Codemasters Group Holdings for £726 million ($956 million).

The companies negotiated in secret, but when information about them was leaked to the press, they made an official statement. Codemasters shares are valued in a deal of 464p each based on the latest price at the close of the exchange. The transaction should be fully completed in the first quarter of 2021, and the purchase will be paid for in shares and cash.

Take-Two Interactive Software Acquires Codemasters Group Holdings for $1 Billion

Codemasters is one of Britain's oldest gaming studios and is best known for projects such as Dirt, F1, Micro Machines, Colin McRae and official Formula One racing games. The company's stock is up more than 60% in 2020. Like other firms in the industry, Codemasters has profited from a surge in video game sales linked to the coronavirus quarantine.

Take-Two believes that the planned deal could accelerate the development of Codemasters, which will gain access to the global marketing infrastructure of Take-Two, and will also be able to use the experience of a large corporation in the field of analytics, product development, as well as brand marketing, the company said.

Thus, Take-Two will receive a studio that is well versed in sports and racing games, as well as licenses owned by Codemasters. For example, the right to create Word Rally Championship games will pass to her, the first of which should be released in 2024. Take-Two will also include Slightly Mad (Project CARS game series), which Codemasters acquired at the end of 2019.^[2]

Notes